Maharashtra Permit Raj for autos, taxis set to end; good news for Bajaj Auto

According to R C Maheshwari, president CV business, Bajaj Auto Ltd, these permits, which cost around `18,000, were being sold at a premium and were costing around `5 lakh in Delhi to around Rs 1 lakh in Pune.

The three-wheeler sales has been on a declining trend with the industry sales declining by 24.84% in April and May 2017 with the passenger segment showing de-growth of 31.69% compared to April-May 2016. (Reuters)

Maharashtra has set the ball rolling to end the ‘Permit Raj’ in the autorickshaw and taxis service segment in the cities across the state. Gujarat has already done it and Maharashtra government has announced it. Now other state governments are expected to follow, R C Maheshwari, president CV business, Bajaj Auto Ltd, said.

Doing away with permits in Maharashtra will be a good news for Bajaj Auto which leads in the three-wheeler segment in India, especially petrol-run vehicles, and also dominates the segment in Maharashtra.Permits will no longer be roadblocks in this market and this will help create employment opportunities, Maheshwari said.

Permits were breeding corruption in the system. These permits which cost around Rs 18,000 were being sold at a premium and were costing around Rs 5 lakh in Delhi to around Rs 1 lakh in Pune, Maheshwari said. This was for a five year permit and it was excluding the actual vehicle price, Maheshwari said. The pressure to recover this huge cost was on the auto driver and was impacting the service offered to customers.The Maharashtra government had on June 17 ended the need for permits in Mumbai, Thane, Pune, Nagpur, Nashik, Aurangabad and Solapur after it discontinued the order that imposed limits on the number of these vehicles on the roads.

These restrictions were in place since 1997 where the government order had limited the permits. The Maharashtra government has made amendments as per the new Central Motor Vehicle Act of the central government.

In Maharastra, Bajaj Auto has 96% share in the petrol segment and it was selling around 3,000 to 4,000 vehicles a month here. Mumbai also has a latent demand for autos which will open up, Maheshwari said. There were around 60,000 dead permits across Maharashtra which was being revived and fresh permits were supposed to be issued but the process was delayed.Another indication of the demand was seen in Pune where there were 3,200 dead permits to be reissued for which the RTO received 20,000 applications. There are aound 46,000 autorickshaws plying in Pune and Pimpri Chinchwad currently.

The three-wheeler sales has been on a declining trend with the industry sales declining by 24.84% in April and May 2017 with the passenger segment showing de-growth of 31.69% compared to April-May 2016.

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These sales were directly related the number of permits issued by every state.

The Bajaj Auto stock went up .039% to close at `2,820 on the BSE on Monday after this announcement.